Good news from my "Oil" gig.

I actually got a Royalty check. The amount is not the issue. The amazement was how much oil they are producing from only 2 wells. We are talking thousands of barrels each. The numbers are staggering. I posted about this last year. I had fun about my windfall and so did you guys. This is getting into serious money. That being said, I hope it lasts.

They sent a sheet with production numbers and all that. It's all about my "Net". I have less than 1 acre of mineral rights that I leased to them. No land. I asked those guys if I had to pony up any money. Nope. The cost of drilling and all that is their money. It costs a million bucks or more to drill a well. It's an 80/20 split. They just happened to Score. They are Way happy. They may just drill a few more wells. My check was for June and July. I can't wait for the August and September check.

Hope it last for you too - but a word of caution...the first 12 months are by far the most productive of a well. The amount of pressure they are putting on the minerals to force them out results in a much higher yield the first 2-3 years (where about 60%-75 of the minerals to be recovered from a well will be netted) and the first year will make up more than 50% of that amount. That said - a good field can yield many new wells and production COULD remain steady for 10+ years.

I personally know a few people who hit it big about 6-7 years ago, started seeing those first few checks would be coming in for years to come - went out and went wild, then saw the double whammy of lower production and dropping prices cut their incomes dramatically.

I actually got a Royalty check. The amount is not the issue. The amazement was how much oil they are producing from only 2 wells. We are talking thousands of barrels each. The numbers are staggering. I posted about this last year. I had fun about my windfall and so did you guys. This is getting into serious money. That being said, I hope it lasts.

As a member of the Choctaw nation, my Dad has been collecting a small oil royalty check every month for 50 years. Each individual check is small, but over the course of the last 50 years, they've added up to a nice little nest egg. I'm not sure if my brothers and I will inherit the mineral rights/royalties or not, as we don't affiliate with the tribe.

Thanks, Guys. I have done quite a bit of research as this is New to me. The wells are horizontal. What is interesting about the Permian Basin is it's like a layer cake. There are about 5 layers . They drill one layer and then go to the next. There a drilling method that is called, "Octipus". One rig can send out arms. I also understand that oil production can be initially very strong and taper out. My one acre is part of a much larger piece of land. 640 acres, I think. My percentage interest is .0005247. That's not much. The kicker is the Law of Large Numbers. The two wells are doing nicely for now. My Royalty is a way Net. All the taxes had been paid. They provide a sheet showing the production and the price they got for the oil per barrel. What stuck me is the price. $42+. I guess, their cost was a lot lower. I'll consider that my "Base". Oil has risen a bit since then. This reminds me of a Stones' song. Something about "Expectations".

Nope. I have all the guitars I need. It's more about cash flow being retired for more than 15 years. My savings are getting low. This "Oil Thing" will provide me with a source of income that may be enough to actually stop the outflow. I'm 67 and my lifestyle has always been "Living Low".